20160606-大华继显-Regional_Morning_Notes_21页_1mb
报告摘要
Regional Morning Notes Summary - 06 June 2016
Core Content
This document provides a comprehensive overview of the regional financial and market conditions across several countries, including China, Indonesia, Malaysia, Singapore, and Thailand. It highlights key stock picks, market indices, and economic indicators, along with insights on corporate events and sector-specific analysis.
Key Sectors and Takeaways
Aviation
- Sector Overview: A mix of high beta and defensive stocks in the regional aviation sector.
- Top Picks: Air China, China Eastern Airlines (CEA), Beijing Capital International Airports (BCIA), and ST Engineering (STE).
- Valuation and Risk: Chinese airlines have attractive valuations but face macroeconomic risks, particularly related to USD exposure and high gearing. However, they are rapidly de-gearing their USD debt exposure.
- Fuel Impact: Rising fuel prices are a concern, but Chinese airlines are likely to hedge part of their international jet fuel exposure, which will help mitigate risks. There is also potential for domestic ticket price increases to pass on costs.
- Other Carriers: Regional carriers like SIA, Thai Airways, and Cathay Pacific may struggle with cost pass-through, but hedging losses are expected to decline.
- Pricing Power: AirAsia has relatively better pricing power but is not recommended for a BUY due to high debt and weak receivables.
- Airport Analysis: Regional airports are seen as more defensive with stronger balance sheets. BCIA is highlighted as a low-risk pick due to its lower valuation and potential to benefit from rising Chinese outbound traffic.
Property - China
- Home Sales: Moderate in May, with a 9.2% mom decline in tier-2 cities. However, sales are expected to improve in June due to more new launches.
- ASP and Land Prices: ASP increased further in 100 cities, and land markets in core cities are overheated. This is a warning sign for the sector.
- Investment Strategy: Preference for quality developers with exposure to core cities acquired at reasonable prices.
- Top Picks: China Resources Land (CRL), Sunac, and China Overseas Land (COLI).
- Discount to RNAV: The sector is currently trading at a 44.5% discount to 2016F RNAV compared to the 5-year historical average of 35.9%.
- Policy Impact: The State Council released supportive policies for the rental housing market, including tax discounts and conversion of commercial projects to residential use. Rumors of potential home purchase restrictions (HPR) in Suzhou, Nanjing, and Hefei are also noted.
- Liquidity: Robust liquidity supports sales momentum, with mortgage rates at historical lows.
Market Indices
| Index | Prev Close | 1D % | 1W % | 1M % | YTD % |
|---|---|---|---|---|---|
| DJIA | 17807.1 | (0.2) | (0.1) | 0.4 | 2.2 |
| S&P 500 | 2099.1 | (0.3) | 0.4 | 2.0 | 2.7 |
| FTSE 100 | 6209.6 | 0.4 | (0.9) | 1.4 | (0.5) |
| AS30 | 5392.5 | 0.7 | (1.4) | 0.6 | 0.9 |
| CSI 300 | 3189.3 | 0.7 | 4.1 | 1.9 | (14.5) |
| FSSTI | 2809.2 | 0.5 | 0.2 | 2.9 | (2.5) |
| HSCEI | 8809.8 | 0.6 | 2.5 | 4.0 | (8.8) |
| HSI | 20947.2 | 0.4 | 1.8 | 4.2 | (4.4) |
| JCI | 4853.9 | 0.4 | 0.8 | 0.6 | 5.7 |
| KLCI | 1636.5 | 0.4 | (0.0) | (0.8) | (3.3) |
| KOSPI | 1985.8 | 0.0 | 0.8 | 0.5 | 1.3 |
| Nikkei 225 | 16642.2 | 0.5 | (1.1) | 3.3 | (12.6) |
| SET | 1436.4 | 0.9 | 1.7 | 3.3 | 11.5 |
| TWSE | 8591.6 | 0.0 | 0.7 | 5.5 | 3.0 |
| BDI | 610 | 0.7 | 1.5 | (3.3) | 27.6 |
| CPO (RM/ml) | 2639 | (0.1) | 1.6 | 2.8 | 19.9 |
| Brent Crude (US$/bbl) | 50 | 0.4 | 0.2 | 9.9 | 33.7 |
Corporate Events
- Meidong Auto Roadshow: United Kingdom, 6-7 June
- Singapore Strategy for 2H16 & Small-Mid Caps Analyst Presentation: Taipei, 6-7 June; Kuala Lumpur, 16-17 June
- China Aviation Oil Singapore Corporate Roadshow: Taipei, 7-8 June
- BIMB Holdings Luncheon: Malaysia, 9 June
Key Assumptions
-
GDP Growth:
- US: 2.4% (2015), 2.5% (2016F), 3.0% (2017F)
- Euro Zone: 1.6% (2015), 1.7% (2016F), 1.7% (2017F)
- Japan: 0.5% (2015), 0.6% (2016F), 1.0% (2017F)
- Singapore: 2.0% (2015), 2.7% (2016F), 3.0% (2017F)
- Malaysia: 5.0% (2015), 4.2% (2016F), 5.0% (2017F)
- Thailand: 2.8% (2015), 3.2% (2016F), 3.6% (2017F)
- Indonesia: 4.8% (2015), 5.0% (2016F), 5.5% (2017F)
- Hong Kong: 2.4% (2015), 2.1% (2016F), 1.8% (2017F)
- China: 6.9% (2015), 6.5% (2016F), 6.2% (2017F)
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Brent Crude (Average): 53.60 (2015), 42 (2016F), 54 (2017F)
-
CPO (RM/mt): 2,168 (2015), 2,500 (2016F), 2,600 (2017F)
Stock Picks
Aviation
- Air China: BUY, HK$5.07, Target: HK$10.20, Upside: 101.2%
- China Eastern Airlines (CEA): BUY, HK$4.16, Target: HK$7.20, Upside: 73.2%
- Beijing Capital International Airports (BCIA): BUY, HK$8.30, Target: HK$11.60, Upside: 39.9%
- ST Engineering (STE): BUY, HK$3.18, Target: HK$3.50, Upside: 10.1%
Property - China
- China Resources Land (CRL): BUY, HK$19.04, Target: HK$27.77, Upside: 45.9%
- Sunac: BUY, HK$4.84, Target: HK$6.51, Upside: 34.5%
- China Overseas Land (COLI): BUY, HK$23.50, Target: HK$33.12, Upside: 40.9%
Analyst Contact
-
K Ajith
- Phone: +65 6590 6627
- Email: ajith@uobkayhian.com
-
David Yang
- Phone: +8621 5404 7225 ext 801
- Email: davidyang@uobkayhian.com
Conclusion
The document emphasizes the importance of valuations, macroeconomic risks, and sector-specific dynamics in the regional markets. It suggests that investors should focus on defensive stocks with strong balance sheets and robust cash flow, particularly in the aviation and property sectors. Key areas of interest include the Chinese aviation sector, where the focus is on the potential for record earnings and improved financial positioning, and the Chinese property sector, where the emphasis is on quality developers and the impact of overheated land markets.
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